




















M ■ a 



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SYSTEMATIZING 
THE FACTORY 



STEPS BY WHICH A RUN-DOWN 

FACTORY WAS PUT ON A 

PAYING BASIS 

HOW INVENTORY WAS TAKEN 

STORES LISTED AND CLASSIFIED 

BUYING SYSTEMATIZED 

PAYROLL COMPILED 

HOW WASTE SPACE WAS 

UTILIZED AND KINKS 

m ROUTINE 

STRAIGHTENED 



By JOHN COAPMAN 




A. W. SHAW COMPANY 

CHICAGO NEW YORK 

LONDON 






THE MAGAZINE OF BUSINESS 



SYSTEM "HOW-BOOKS" 

How TO Increase Your Sales 
How TO Increase a Bank's Deposits 
How to Systematize the Day's Work 
How to Increase the Sales of the Storb 
How to Sell Real Estate at a Profit 
How TO Sell More Life Insurance 
How TO Sell More Fire Insurance 
How TO Write Letters that Win 
How TO Talk Business to Win 
How TO Write Advertisements that Sell 
How TO Sell Office Appliances and Supplies 
How TO Collect Money by Mail 
How TO Finance a Business 
How TO Run a Store at a Profit 
Others in Preparation 

FACTORY "HOW-BOOKS" 

How TO Get More Out of Your Factory 
How Scientific Management is Applied 
How to Get Help 
How TO Cut Your Coal Bill 
How TO Handle Workmen 
How TO Systematize Your Factory 
Others in Preparation 

STANDARD VOLUMES AND SETS 

THE KNACK OF SELLING 

(In Six Books) 

BUSINESS CORRESPONDENCE LIBRARY 

(Three Volumes) 



BUSINESS MAN'S LIBRARY 
(Ten Volumes) 



BUSINESS ADMINISTRATION 



BUSINESS MAN'S ENCYCLOPEDIA 
(Two Volumes) 



THE SYSTEM OF BUSINESS 
(Ten Units— Thirty Volumes) 

In Preparation 



//i\((7l|-Q/''J 

THE MAGAZINE (/MANACEMEOT 



Copyright, 1913, by 
A. W. SHAW COMPANY 






n 



CONTENTS 



Chapter Paob 

I WHICH STEPS TO TAKE 

FIRST 6 

When the manager overhauls his plant the first step is to 
list the apparently wrong things. The loose ends found 
in this factory — lax time keeping, no cost keeping, reckless 
buying, verbal orders and so on were brought together, 
then definite means taken to straighten out the tangle. 
The forms and charts tell just how this was done. 

II FINDING WHAT THE FAC- 
TORY IS WORTH ... 16 

Inventory records and how to get them are described in 
this chapter. Forms for assembling totals of raw and 
finished stock equipment and machinery are shown. Not 
least valuable a table on depreciation and hourly wage 
rates for machinery based on actual statistics. 

ni CHECKING THE PAYROLL 

WITH COSTS .... 28 

Making over the system of handling and paying men 
brought to light in this factory, principles that are widely 
applicable. Reductions of lost time, methods of charging 
time on jobs, tardy lists, pay checks and operation cards 
are shown and method of using them described in detail. 
There are seventeen forms in this article. 

IV MORE WORK IN THE SAME 

SPACE 48 

To get more work through a given department generally 
means rerouting that work and changing the methods of 
handling it. How work was ordered, scheduled, accounted 
for and shipped is detailed with ten forms. By using 
this system the manager kept in touch with the work of 
each department and knew how departmental costs were 
running. 

V SMOOTHING OUT KINKS 

IN ROUTINE .... 58 

Out of his experience the author points to weak points in 
routine handling of work. Whether you run a small shop 
or large, practical experiences may not have been yours. 
In this final chapter the practical "nubs" of running a 
system are shown and the ways by which they have been 
smoothed out are told. 



LIST OF FORMS AND CHARTS 

FORM PAGE 

1 REQUISITION TO PURCHASE 8 

2 QUOTATION CARD 8 

3 ORDER BLANK 8 

4 RECEIVING REPORT 10 

5 INBOUND WAGON RECORD 10 

6 LUMBER REPORT 11 

7 DAILY REPORT OP LUMBER USED 11 

8 DAILY PURCHASE REPORT 13 

9 INVOICE LIST 14 

10 LIST OF CHARGED INVOICES 14 

11 GENERAL STORES LEDGER 18 

12 STOCK REQUISITION 19 

13 FINISHED STOCK RECORD 20 

14 BIN LABEL 21 

15 TAG INVENTORY CARD 22 

16 EQUIPMENT SHEET 18 

16a EQUIPMENT RECORD 24 

17 REQUISITION FOR HELP 30 

18 APPLICATION BLANK 30 

19 NOTICE OF EMPLOYMENT 30 

20 PAY CHECK 39 

21 OPERATION CARD 38 

22 CLOCK-RECORD CARD 40 

23 PIECE WORKER'S DAILY REPORT 38 

24 PRODUCTION SCHEDULE 41 

25 EMPLOYEE'S PIECE WORK RECORD 41 

26 DUPLICATE PAY CHECK 39 

27 REPORT OF PERSONS TRANSFERRED 40 

28 REPORT OF PERSONS ADVANCED 40 

29 TARDY LIST 43 

30 YEARLY LOST TIME REPORT 43 

31 FINAL PAY TICKET 45 

32 IMPREST CASH VOUCHER 46 

33 PAY ROLL DENOMINATION SHEET 31 

34 PRODUCTION ORDER 51 

35 DUPLICATE PRODUCTION ORDER . 51 

36 FINISHED STOCK SCHEDULE 53 

37 INTER DEPARTMENTAL RECEIPT 53 

38 TRIPLICATE SHIPPING MEMO 52 

39 DAILY LABOR COST SHEET 54 

40 DISTRIBUTION OF MATERIAL AND EXPENSE . . 54 

41 DAILY MEMORANDUM OF BODY SHIPMENTS . . 54 

42 MACHINERY INVENTORY RECORD 55 

43 COMPARATIVE COST CARD 55 

CHART 

1 THE OLD ORGANIZATION 34 

2 THE NEW ORGANIZATION 35 

3 HOW TO PLAN A FACTORY OFFICE 33 

4 EMPLOYMENT CHART 31 

FIGURE 

1 INVOICE CHECK STAMP 13 

TABLE 

1 MACHINE WAGE EARNINGS 36 




OVERHAULING A 
FACTORY 

f^NE concern made a con- 
tract to deliver its product 
at cost — plus eight per cent. Be- 
fore that time the real costs on the 
product were not known until 
the end of the year. 

But the company that bought 
couldn't wait for the annual in- 
ventory of the company that sold. 

Because costs had to be known 
monthly and accurately the sel- 
ler s factory was completely 
overhauled — and its methods 
put on a modern basis. These 
methods got results. 

Whether you carry your costs 
in a vest pocket note-book or get 
a detailed weekly cost sheet from 
your factory you will find ideas 
in this chapter that will interest 
and help you. 

Each idea has worked. 

— L. I. Thomas 



I 



WHICH STEPS TO TAKE 
FIRST 



PUTTING a factory on a paying basis 
requires first the study of all the condi- 
tions holding in the old plant. This 
may seem an obvious statement, yet a good 
many men make the mistake of starting at 
once to reorganize the time-keeping depart- 
ment, the material handling department, or 
oj:her branches without considering each 
branch's relation to all the others and to the 
parent trunk. 

The first thing I did, consequently, in 
straightening out the tangle in the factory, 
was to investigate all the conditions. I found 
a very loose time-keeping system; no cost- 
keeping system; materials were purchased 
without securing competitive bids; no record 
of quotations . 

After I had spent three weeks investigating 
the conditions, I put down on paper the gen- 
eral plan of organization. I first charted the 
organization and the duties of the various per- 
sons connected with the heads of the depart- 
ments, and then with the whole plan in view 
I re-arranged the organization along the lines 
shown in Chart 2 (page 35). 



FIRST STEPS TO TAKE 7 

The old organization is shown in Chart 
1 (page 34). The purchasing agent seemed 
to have his hands full. In fact he was unable 
to give proper attention to any one subject. 
He had some duties in common with other 
heads of departments. And as the manager 
of the factory was present only a compara- 
tively short time during the day a great many 
things were allowed to pass unnoticed. Such 
a subject as the maintenance of the plant and 
equipment, for example, was overlooked, be- 
cause no one was directly responsible for it. 

This organization was boiled down to the 
form shown in Chart 2. The same men were 
retained, but the duties and responsibility of 
each one were diagrammed so that no misun- 
derstanding could exist. After the whole plan 
had been thoroughly considered and worked 
out, blue prints of this chart were made and 
distributed to each department in the factory. 
This method of distributing information in 
the factory was followed by putting any part 
of the new plan into effect. The head of each 
department received a bound copy of the 
methods decided upon so that he could under- 
stand exactly his relation to all the other de- 
partments and to the work of which he was 
in charge. 

When putting such a plan into effect, the 
hearty co-operation of each individual, which 
is essential, can be secured by making it 
of pecuniary advantage to follow out the plans 
as laid down. The men in charge of depart- 
ments naturally consider that the plans upon 
which they were operating are good and do 
not take very kindly to new burdens imposed 
upon them by a reorganization or by the re- 
arrangement of the work formerly handled in 
their departments. By paying a bonus on 



8 SYSTEMATIZING A FACTORY 

daily production the department changes in 
routine, however, may often be accomplished 
successfully. After it is explained to the man 
that he can make more by working out the 
plan proposed he is not long in deciding that 
the new plan is at least worth trying out. 

After a general plan of organization has 
been developed the second step is to arrange 
the methods used from the buying of the raw 
material to the shipping of the product. An 
easy way to do this is to take some one par- 
ticular product and trace its course from start 
to finish through the plant, putting all the 
different steps down on paper so that the 
actual routine used in the factory can be seen 
graphically. After this has been done it will 
be found that the purchasing and stores de- 
partment is a starting point for reorganiza- 
tion. 



THE AUTO MANUFACTURING CO. 



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THE AUTO MFG. CO. 




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PURCHASINa DIPT. DATE 




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FORMS 1, 2 and 3: The center form is the order on the factory 

buyer, the form at the back is the buyer's order on the maker, issued 

after he has accepted the bid made on Form 2 at the front 

So in reorganizing this factory the start was 
made with the requisition blank. As has been 
said, no regular system of buying had been in 



FIRST STEPS TO TAKE 9 

use in the factory. So both the purchasing 
and stores departments were replanned. When 
it was necessary for any raw materials, sup- 
plies or tools to be purchased, it was arranged 
so that the department head requiring the ma- 
terial was to make out a requisition called a 
"requisition to purchase" (Form 1). This 
was sent from the department head to the 
superintendent for approval. If the cost was 
considerable this requisition had also to have 
the approval of the factory manager, and in 
cases where purchases amounted to over one 
hundred dollars the general manager of the 
plant O. K.'d the requisition. The requisition 
thus O. K. 'd was given to the purchasing agent 
and constituted his authority for making the 
purchase. 

If the item was something which the pur- 
chasing agent had no quotations of on hand 
a "request for quotation" card (Form 2) was 
sent to the firm or firms handling the goods 
required. They had only to fill in the price, 
sign and return the card. These cards were 
made standard size (three by five) so that they 
could be filed conveniently in the indexed 
drawer and kept as a basis for price on future 
orders. After the cards were returned a clerk 
entered the prices upon a quotation record 
card for general reference. 

When a purchase was to be made the order 
was sent out on a sheet like that shown in 
Form 3. Three copies of this were made, 
the original going to the supplier. The first 
copy was kept by the purchasing agent and 
the third sent to the storekeeper. The latter 
checks off the receipts on his copy from the 
receiving report (Form 4). 

What a system of this sort can save is well 
illustrated in the buying of lumber in this 



10 



SYSTEMATIZING A FACTORY 



RECEIVING REPORT 



HECD FROM- 
ADORCSS 



COnOITION_ 



. COUNTED By_ 



-CHECKED BY. 



DISPOSITION. 



INBOUND WAOON' 



WAGOH no 



plant. The company purchased lumber in car 
shipments and the railroad allowed them 
forty-eight hours to unload the cars before 
charging demurrage. An analysis of the first 
monthly statement revealed the fact that the 
company was paying over two hundred dol- 
lars per month for demurrage charges alone. 
Some one was immediately asked why. 

It developed 
that only one 
lumber inspector 
was engaged and 
it was thought 
that the business 
hardly warranted 
the extra expense 
of another man 
whose salary was 
one hundred dol- 
lars a month. 
Judging from the 
records another 
inspector was 
warranted and he 
was put on as soon 
as he was found. 
Then, in order to prevent absolutely any 
more demurrage charges unknown to the 
management, an ''inbound car record" (Form 
5) was devised. The local freight agent was 
requested to notify the storekeeper by tele- 
phone as soon as a car consigned to the com- 
pany arrived in town. The departments 
manufacturing body tops were housed in a 
separate building a few blocks away with its 
own switching facilities. Formerly the rail- 
road would switch cars to one plant that be- 
longed to the other factory building. This 
meant switching charges which were unneces- 



FORMS 4 and 5 : The receiving report 
keeps the storekeeper and the buyer 
informed of all incoming goods. While 
demurrage is saved by giving immediate 
disposition of incoming cars, on the 
wagon record 



FIRST STEPS TO TAKE 



11 



sary. The storekeeper, when acquainted by 
telephone with the arrival of the car, could 
consult his records and determine which plant 
required the goods, and so saved time and 
switching charges. 

Keeping Accurate Track Daily of All In- 
coming Stock 

The storekeeper noted the date of the 
arrival of the car on his card and filed this 
record two days ahead. The morning of the 
second day his first dutj^ was to inspect these 
cards. All cars which were not unloaded 
were taken care of before the close of the day, 
if this was in any way possible, so that he 
could notify the railroad. The saving result- 
ing from this little system alone was surpris- 
ing. From thirty to forty dollars a week was 
saved on demurrage charges alone, not by in- 
vesting any money in machinery but simply 
by keeping track of the arrivals, and it only 
required a few minutes' time each day. 

The lumber inspector reported the grades 
and quantities received on the ''lumber re- 



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FORMS 6 and 7: The wastage in cutting and handling lumber was 
reduced by use of these forms 

port" (Form 6) and the purchases were 
settled on this basis. Most of the lumber was 



12 SYSTEMATIZING A FACTORY 

put into the kilns shortly after its arrival, the 
usual time required by the mill departments 
directly after it had been removed. To check 
this, however, a ''daily record of lumber used'* 
(Form 7) was issued and turned in to the 
storekeeper by the lumber inspector so that 
each order could be charged with the proper 
amount of lumber. 

Hoiv Waste in Lumber Was Reduced Fifteen 
Per Cent 

This all had an interesting e:ffect on the re- 
duction of the waste in lumber. In the ordi- 
nary wood-working plant the waste runs up 
to thirty or even fifty per cent. After the 
amount of material required to actually com- 
plete the jobs in process was checked against 
the deliveries of the purchases made, it was 
discovered that the waste in lumber in this 
plant was very large. 

Foremen and stock-cutters were instructed 
that the amount of waste must be decreased 
and the work of the men was analyzed so that 
it was known definitely who was responsible 
for the largest wastes. After the first month 
or two had passed, waste in lumber could be 
estimated with a certainty as not exceeding 
twenty-five per cent and ordinarily under 
fifteen per cent. This meant a big and imme- 
diate saving. 

When you can save twenty per cent of lum- 
ber that costs forty-five dollars per thousand, 
it means nine dollars on the right side of the 
ledger for every thousand feet cut. As one or 
two thousand feet of the stuff was cut up each 
week it soon amounted to something worth 
while. Some lumber, of course, cost less than 
this ; some cost more, but the saving was made 
on all grades and kinds. Another plan which 



FIRST STEPS TO TAKE 



13 



was put in operation and wMcli saved expense 
was inaugurated in the purchasing depart- 
ment. This was a daily report of purchases 
(Form 8). Before this plan was adopted 
the accounting department would often re- 
ceive bills for purchases amounting to con- 
siderable sums. It was sometimes inconven- 
ient to meet pajnuent due on purchases be- 
cause the disbursement of a large sum at an 
unusual time was not planned for. 

Of course, if an 
extra large pur- 
chase of any kind 
was made some- 
one would keep it 
in mind, but trou- 
ble was caused in 
not remembering 
that an accumula- 
tion of many 
small purchases 
of medium size 
often exceeded 
the so-called big 
ones. No details 
were asked for on 
the purchase re- 
port, but at the 
end of the day the 



DAILY PURCHASE REPORT 


PUR. TO DATE 
MATURING 


TIMBER 


MISCELLANEOUS 1 








































DATE INVOICE RECEIV 
TERMS AND PRICES C 








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DELIVER! 










EXTENSIONS AND TOTALS 0. K. 










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STOBEKE 
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PURCHASING DEPARTMENT 



FORM 8 and FIGURE 1 : A daily pur- 
chase report and a rubber stamp that 
helped systematize buying 



purchase orders issued during the day and the 
amounts would all be carefully totaled. 

This little report alone soon helped to regu- 
late the purchasing department, for the ac- 
counting department could easily inform the 
purchasing department when purchases were 
being made which might be inconvenient to 
meet and different terms could be very easily 
arranged by the purchasing department. 

The buying of raw materials was further 



14 



SYSTEMATIZING A FACTORY 



facilitated by the prompt handling of invoices. 
When the mail was opened all invoices were 
stamped on the reverse side with information 
like that shown in Figure 1. The invoices 
were then sent to the purchasing agent who 
had them checked for prices, terms, deliveries, 
extensions and totals and charged them against 
the proper accounts. If they were correct the 
invoices were then listed on Form 9, known 
as *' invoice list." 













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FORMS 9 and 10: The accounting department kept the purchasing 
agent within his limits by using these forms 

The duplicate of this was retained in the 
purchasing department while the original, to- 
gether with the invoices, was sent to the 
storekeeper. The latter noted on the back of 
the invoice the date the goods were received, 
and^'O. K.'d"it. 

These invoices were then listed on Form 10, 
charged. The original of this report and the 
invoices were sent to the accounting depart- 
ment from which the checks in settlement were 
sent out. 




THE FACTORY 
GOVERNOR 

(^N every steam engine there 
is a regulating" device — a 
governor that balances the sup- 
ply of steam with the demand for 
power. When more power is 
needed more steam is admitted; 
when the load decreases the gov- 
ernor automatically lessens the 
amount of steam fed to cylinder. 

In every factory one man per- 
forms a similar function — he 
balances the work of the factory 
with the sales and administra- 
tion policies of the business. 
Without him the business is out 
of balance in one direction or 
another. 

A factory manager must keep 
the balance between cost to pro- 
duce , quality of product and 
service to the customer. 

— F. M. Feiker 



II 



FINDING WHAT THE FACTORY 
IS WORTH 



WHEN a new business is launched or an 
old one taken over, the first duty is 
to ascertain the assets. Inventory is 
taken. Everything about the plant or the 
premises is counted and weighed. After 
everything is inventoried the next step, which 
many consider the most difficult, is the process 
of placing valuation upon the goods. Many 
methods are in vogue for this and a different 
one is necessary for practically every firm. 

As was explained in a preceding chapter, 
after the goods are ordered, shipped, received 
and paid for they represent just so much 
money and should be treated as such. One 
thing more, many buyers will often make a 
purchase because the price, free on board at 
the factory of the maker, is less than what 
they might be able to get in their own town. 
The cost of freight or express charges and the 
cartage does not appear to them as expense 
that should be included in the cost of the arti- 
cle. One gentleman informed me apon one 
occasion that the company hired a team by 
the day to do the hauling from the freight 
house and as for the freight or express, *'0h, 



TAKING AN INVENTORY 17 

a very small matter of little or no conse- 
quence !" -He changed Ms mind later on when 
he was obliged to move to another city and 
had the freight to pay on his furniture. 

A general stores ledger card (Form 11), 
upon which was entered the purchase order 
and the receipts as shown by the receiving re- 
ports, was planned. As the freight or express 
bills were received with the goods, in most 
cases it was a simple matter to enter these 
upon the card with the receiving report. The 
matter of cartage was more or less hazy. 
Oftentimes the driver would bring back from 
the freight house several various articles 
weighing different amounts. Where possible 
these were apportioned, but when this was 
out of the question we charged them to ''mis- 
cellaneous freight and cartage." All with- 
drawals from stock were entered on this ledger 
and taken from the requisition blanks. 

One thing I found very much in evidence 
was the ease with which supplies, such as 
nails, screws, sandpaper, and so on, could be 
obtained. The stockkeeper admitted that he 
had been told not to allow any goods to leave 
without a requisition. ''But the boys would 
sometimes forget to get one from the foreman 
and I didn't like to make them go back," or 
else "Henry was building a little chicken-coop 
and wanted a few nails, not very many, you 
know — oh, a couple of handfuls or so — and I 
kind of wanted to be obliging, so let him have 
them. Don 't cost very much, I don 't suppose. ' ' 

Instructions were immediately issued to all 
department heads that in no case would ma- 
terial be issued from stock without an order 
(Form 12) signed by them. The stockkeeper 
was informed that if any more instances were 
found of material leaving his department 



18 



SYSTEMATIZING A FACTORY 













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TAKING AN INVENTORY 19 

without the necessary papers he could con- 
sider himself discharged and with no recom- 
mendation. This had a salutary effect upon 
the whole plant immediately. A few remarks 
were made that the company was getting 
mighty close all of a sudden. 

The stockkeeper in each of the stock de- 
partments recorded his stock receipts and dis- 
bursements upon the stock card shown by 
Form 13. The various bins and aisles were 
numbered and upon each bin was attached a 
card holder so that bin stock cards (Form 14) 
might be kept there. As articles were re- 
moved or placed therein it was noted upon the 
card, thus enabling one to tell the quantity 
contained without being obliged to consult the 
records at the desk. 

It was soon found necessary to inventory 
the plant. This had been done about six 
months previously but no one cared to take the 
responsibility of the figures shown, and upon 



GELNCRAL STORE OCPT. 


flftTC 






PLEASE SUPPLY THE FOLLQWINa MATERIAL AMO OtWt TO 












QOANTITT 


SYM. 
NUMBER 




ARTICLE 




•MOUNT 






























- ;■ ; i| 


\ i i 


i : ! 


i ; } 


- I \ 


ORDER FILLED BV 




cnDrMaK) 















FORM 12: This standard requisition for material stopped petty losses 

of stock 

investigation it was found that they didn't 
check up ' ' within a mile. ' ' Preparations were 



20 



SYSTEMATIZING A FACTORY 



made for this some two weeks previous to the 
time set. The manager and department heads 
calculated that at least three days were neces- 



NAME 


FINISHED STOCK RECORD 

PART IMrt 


NO. REQUIRED 




SECTION ^ 


lo. Rira iMrt. 


r 






DATE 


QUAN. 
RECD. 


TOTAL 


OUT ON 
ORDER 


TOTAL 


BAL. ON 
HAND 


BE- 
IvrSBKS 
















i| 








i t 














i i 
i! ! 






\ \ ; i: 1 


1 


1 








i 


i 1 


. 






^ ^ . i il , ,- 1 



FORM 13 : A balance sheet for stock on hand in the stores 



sary. I suggested that we shut down Thurs- 
day night and take Friday and Saturday 
morning, but their previous experience had 
taught them that three days were none too 
much. It wasn't, with their method of but two 
men in the department — one to call off and 
the other to record. 

First of all, tags similar to that shown in 
Figure 15 were ordered from the printer. 
These were numbered consecutively and a rec- 
ord was kept as to the department receiving 
them. At a meeting of the foremen the rea- 
sons for this inventory and the imy»ortance of 
its correctness were explained. On some floors 



TAKING AN INVENTORY 



21 



were located portions of one or more depart- 
ments and. it therefore became necessary to 
divide the jurisdiction of each foreman so that 
the best results would be obtained. 

All machinery and equipment were turned 
over to the foreman of the mill department 
and he was given the millwright as first as- 
sistant. In the other departments, where it 
was found that interference might result be- 
cause of too many cooks, one foreman was 
made responsible for his floor and given the 
other foreman as his first assistant. As the 
plant was to be closed for three days orders 



PART NO. 




RECTH 


3N NO._ 




BIN NO. 


NflMF 


















^ 




IN 


OUT 1 


DATE 


QUAN- 
TITY 


DATE 


QUANTITY 


BAL. 


DATE 


QUANTITY 


BAU 


























































i 














































































^ 
















' 







FORM 14: A label used to keep track of the stock in each bin. All 
disbursements are noted on it 

were issued to the various department heads 
to retain as many of their men as they con- 
sidered necessary. The storekeeper was 
placed in full charge of all inventory work 



22 



SYSTEMATIZING A FACTORY 



and was assisted by the head of the cost de- 
partment. 

The plant closed on Wednesday night, and 
Thursday morning the work of distributing 
the tags was begun. Instructions had been 
issued to the effect that everything in the plant 
was to be tagged. 
If a lot of parts 
were found in one 
portion of the de- 
partment and an- 
other lot in an- 
other portion, 
each individual 
lot was to be 
tagged. This re- 
quired the best 
part of Thursday 
morning. 

The foreman 
then delegated to 
each workman 
the task of count- ' 
ing or weighing 
the various lots. 
One man would 
be instructed to 
take a certain 
number of lots 
and was told to simply weigh or count the ar- 
ticles and mark the number on the tag. No 
other information was desired from him. The 
foreman would then follow and fill out the bal- 
ance of the tag, tearing off the lower portion 
which was later sent to the office. 

By Thursday night practically everything 
had been inventoried. The foreman then 
made the rounds of his territory and removed 
the stubs which were left from the day pre- 



/ 

S'CAsoN or 


© '" \ 

191 


CARD NO 


DEPT. 








CARD NO. 


t> 


EPT. 






MATEqiAt FINISHED STORES 1 
AND WORK IN PROCESS I 


OESCRIP- 1 LAST OP- 
TION 1 ERATION 


QUANTITY UNIT 


1 1 1 1 




1 




1 


i 1 1 










( 
1 




TOOLS. EQUIPMENT, MACHINERY 1 
AND SUPPLIES 1 


DESCRIP- 
TION 


QUAN- 
TITY 


UNIT 


SERIAL NO. 








OUR NCI. 








LOCATION 












































r 















FORM 15: These tags were used to 
mark all the facts while taking inventory 



TAKING AN INVENTORY 23 

vious. This constituted a check on his work. 
Because it became necessary for him to visit 
each lot he could see whether or not it had 
been inventoried. These stubs were also 
turned in to the office where they were checked 
up with the remainder of the tags to make cer- 
tain that all tags were in. 

The tags were sorted according to depart- 
ments and then to materials. After this was 
done it was a comparatively easy task to price 
them when they were listed as : 

Tag No. Article Quality Price Value 

By totaling this list for each department 
the value of that department financially was 
shown by the inventory. To get the total val- 
uation it then was necessary to total the values 
of the individual departments. After this 
was done the storekeeper could obtain the 
quantities of material throughout the plant 
and after deducting from outstanding orders 
was able to show the net amount on hand. 

This took care of all the stock in a very sat- 
isfactory manner, but gave no record of ma- 
chinery and equipment. For valuing this 
class of assets it became necessary to call in 
the service of a machinery dealer as some of 
the equipment was of an unknown age. 
Equipment sheets were then devised (Forms 
16 and 16a) to record all information required 
regarding the equipment. 

One of these sheets was issued for each piece 
of equipment. Where the name of the manu- 
facturer and dealer were known, this was re- 
corded and if no invoice could be found a let- 
ter was sent requesting a duplicate invoice. 
The date of purchase was also essential, as was 
the date of manufacture, providing it was pur- 
chased second hand. The freight bills were 
also located wherever possible and the cartage 



u 



SYSTEMATIZING A FACTORY 





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_ 







TAKING AN INVENTORY 25 

bills. These two items, however, were rather 
hard to get. The cost of pulleys and belting 
was easy to obtain from the catalogues and 
price lists. 

When a new machine was purchased the 
head of the cost department issued an equip- 
ment sheet from the purchase order. An 
equipment number was also assigned at the 
time. A note was made on the purchase order 
giving this number and requesting that it be 
painted on the machine. Upon arrival it was 
possible to obtain the freight bills, also the 
cartage charges. All requisitions for belting, 
pulleys, and so on, and also labor and supplies 
in erecting them, were charged to this number. 
It will be seen that once started the complete 
cost of the machine installed ready to run was 
put on record. 

The probable life of the machine was de- 
cided upon and this was noted at the top of 
the sheet. If the machine cost $1,000 and it 
was decided its life was finished at the end of 
ten years, that machine should pay for itself 
and also pay interest within that time. Six 
per cent was taken as a fair rate of interest 
and Table 1 (Page 36) was compiled to facili- 
tate calculations. 

To get a little ahead of the story, it was now 
an easy matter to keep track of all time that 
the machine was operated by having the work- 
man note the number of his machine on his 
time card. Observation showed that the aver- 
age machine was operated about one hundred 
and sixty-six hours per month, or two thou- 
sand hours per year. At this rate if it were 
desired to retire this machine at the end of 
ten years it must be credited with $133 per 
year, this amount to be distributed over the 
various jobs produced on this machine. Ac- 



SYSTEMATIZING A FACTORY 



cording to Table 1 it is seen that it is neces- 
sary to charge each job with $0.0665 for every 
hour that the machine is used. 

The amount each machine must earn per 
year is arrived at by multiplying the amount 
to be earned per hour as shown in Table I by 
2,000, the number of hours in a working year. 

By means of this chart the value of each 
machine was known, since a record of how 
many hours it was operated, and how much to 
charge each hour, was available. When the 
time came to scrap the machine there was a 
complete history of it. 

As the inventory cards came into the office 
they were filed for the time according to de- 
partments. After they had all been received 
they were then divided as to machinery or 
equipment, finished work and that in progress. 
After being priced it was an easy matter to 
list them by their class under the departments. 

The main building was of brick, containing 
the office, paint shop, shipping and assembling 
departments. The mill work was done in an 
abutting building of frame construction. One 
or two changes were made in the location of 
departments from one building to the other 
and thereby saved a trifle on the insurance. 



Building 


Amount 
Carried 


Old 

Rate 


Pre- 
mium 


New- 
Rate 


Pre- 
mium 


Saving 


Brick 


$10,000 

5,000 
3,500 
2,000 
1,000 
18,000 


$2.80 
3.85 


$280.00 
192.50 


$2,00 

3.05 
3.30 
3.30 
3.30 

1.58 


$200.00 

152.50 

115.50 

66.00 

33.00 

284.40 


$80.00 


Frame Addition to 

Brick 

Dry Kiln 


40.00 


Bending Room . . . . 

Drying Room 

Lumber 


No fre\- 
ious Rate 

1.871 336.60 


52.20 











Above is a copy of the old and new rates, 
together with the saving in premiums. To 
obtain this saving required an outlay of less 
than twenty dollars. 



LAWS 
FOR MANAGERS 

^ MODERN shop must be 
more or less of a school- 
house, and in it the manager 
must be one of the pupils. 

Equipment is not the best be- 
cause we own it 

Obsolete machinery is the foe 
of profits, the brother of high 
cost and the friend of bad 
methods, 

A thing is not right because 
we do it. 

None of us can afford to be 
deceived by our own affairs. 

It is better by self-criticism to 
find and correct our own faults 
than to have our customers do 
it for us, 

— William C. Redfield 



Ill 



CHECKING THE PAY ROLL 
WITH COSTS 



IT had been the custom in this plant since 
its first inception to call the factory man- 
ager, superintendent or foreman when- 
ever an applicant for employment presented 
himself. The request for an interview was 
usually made to the telephone operator, whose 
desk was near the office entrance. Since she 
was well acquainted with most of the inhabit- 
ants of the town and desirous of pleasing 
everybody and aiding her friends, the operator 
would immediately create confusion in the 
whole plant, if necessary, in her somewhat 
overzealous endeavor to locate the department 
heads. She was no respecter of persons and 
it mattered not that the person she desired 
was in conference. Usually he would come 
to her desk, ascertain her desires and would 
then talk with the applicant. 

This plan of hiring men was abandoned. 
The accounting department was housed in a 
room adjoining the entrance as is shown by 
the office arrangement (Chart 3, page 33) . The 
location of the timekeeper was changed and 
a window was cut in the partition at his back. 
How the office was rearranged is also made 



PAY ROLL AND COSTS 29 

clear. Just above the window was mounted 
a blueprint (Chart 4, page 31). This chart 
was called the ''Employment Chart" and the 
timekeeper could tell at a glance just what 
class of employees were in demand through- 
out the various departments. The employ- 
ment department was turned over to the time- 
keeper. Each department head would issue 
a ''Requisition for Help" (Form 17) when in 
need of help of any kind. One of these re- 
quisitions was issued for each person desired. 
Upon receipt of these the timekeeper would 
place a peg or glass-headed push-pin in one of 
the squares opposite both the department and 
the class of employees. 

When an applicant presented himself it was 
a very simple matter to tell whether or not he 
was needed. If not, he was requested to fill 
out an application as shown by Form 18, pro- 
viding the timekeeper thought that the com- 
pany would ever care to engage him. These 
applications were retained on file and when a 
requisition for this grade of help was received 
the applicant was sent this form letter: 

"You will recall having left with us an application 
for a position. We now have a vacancy and would be 
glad to have you call on the writer for an interview at 
your earliest convenience. In case you are imable to 
call, or do not care to consider a position with us at 
this time, kindly advise us by return mail, or telephone 

Mr. , who will endeavour to place you to oiu- 

mutual advantage. 

"Yours very truly, 

"Auto Mfg. Co." 

If the applicant failed to appear possibly 
others might be tried unless the supply was 
abundant and the demand urgent, and in that 
case the first promising-looking candidate 
would be ushered to the foreman. If upon the 



so SYSTEMATIZING A FACTORY 

close of the interview he decided that the appli- 
cant was suitable for the position he would fill 
out a copy of ^'Notice of Employment" (Form 
19) and instruct the applicant to turn it in 
to the timekeeper on his way out. 



REQUISITION FOR HELP 

POH BePAHTMtftr _»^™.«.-____ — DATE ..m^,.,- „■■■,. ■.„.n.,.„,.m^ 

KINO OF HELP WAN.teft >—— , . ' 



AGE REQUIRED -^.^l^f t PREFeftfteSi- 

SINGLE J 
REMARKS — 



APPLICATION FOR EMPLOYMENT 

§if UAtidrl A3 

NAME— 

AOORESd 



MARRfEO Vk&ti eXMCttft ^T8. M« H». 

.SERtfEO ^ ^»B5» A^MENtlCESHIP WITH ~^ 

Was EM^L8ve6 6V 



-<;T9. PER MR. 



LA^rEMPLOflTB B 
nCMARKS': ~ — 



NOTICE OF EMPLOYMENT 

I HAVE tmS DAY ENGA^GEO -^ 



-WHOSE DUTIES WILL BE - 



WILL START. 
DATE — — — 



OePARTMENT HEAD 



FORMS 17, 18 and 19: These self-explanatory blanks are used in 
hiring men 

The timekeeper then assigns a number to 
the new workman and calls his attention to a 
copy of the shop rules which are posted in a 
conspicuous place. A payroll card and also 
an operation card (Forms 20 and 21 respect- 
ively) are then made out and placed in the 
clock-rack in the department. At the same 
time a clock-record card is filled out (Form 
22) and placed in the file for future use. 

Upon his arrival for work the employee de- 
taches his ''pay check" from the payroll card 
and registers his arrival on it. He then re- 
ports to the foreman for work. When as- 



PAY ROLL AND COSTS 



31 





























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S2 SYSTEMATIZING A FACTORY 

signed to a job, lie registers "in" upon Ms 
operation-card at the time-clock. 

An attempt was made to control the produc- 
tion so that a foreman could keep his men em- 
ployed on but possibly one or two jobs a day 
or week. At the end of the day or job the 
employee would punch his operation-card out. 
As the pay period was a half month the card 
was printed for this period. 

A workman might use but one operation- 
card for the whole pay-period and then again 
he might have one for every day or oftener. 
If a great many cards were used, the superin- 
tendent was asked to investigate. This was 
necessary because at first the foremen of some 
departments did not plan their work right and 
would often assign a man a small job of little 
or no consequence simply because he did not 
know what to do next. 

The operation-cards were turned in to the 
timekeeper upon the completion of the job or 
in any case at the end of the pay-period. 
When the job was finished the elapsed time 
was known and from this the labor costs could 
be computed. The payroll-card in this case 
merely served as a check because the opera- 
tion-cards should check up with the payroll- 
card. 

It is needless to say that at first they didn't. 
In some instances there would be a difference 
of over one hour on some days. This was ex- 
plained in many cases by the workman in that 
he was waiting for a new job. Not always 
would he loaf one hour between any two jobs, 
but in some cases where it was necessary to 
have him work upon three or four in the 
course of the day he would be forced to lose 
twenty to twenty-five minutes, waiting. A 
record was kept of this and at the end of the 



PAY ROLL AND COSTS 



33 



1 


riue 


^ 
















COST 






TYPF- 






ACCOUNT 
ANT 




300K 

KEEP 

ER 


^ _^ WRITER PHONE 






*SST- PURCH 






KEEPER 


















\ 


FILE 








\ 




SHEL 
VES 


♦■ 


-POST V t^ 
\ 






SHIP- 


1 






1 




- ^ 


PING 


1 




CLERK 






MANAGER 






.,-. _..„ 






FACTORY 
MGR.- 




SAFE 


^ 


CHART 3 (Page 28) : The before and after arrange- 


ments of the factory office are shown here. The new 


office arrangement below facilitated the discharging of 
employees 


' w^a ^ 


COST 


II 


WINDOW 


ACCOUNT- 
ANT 














TIME 
KEEPER 




BOOK 
KEEP 


iwower nsjir 








ER 




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34 



SYSTEMATIZING A FACTORY 































MANUFAC- 
TURING 






















SHIP- 
MENTS 






FACTORY 
MANAGER 




SUPT. 
BODY 
PLANT 


- 


















WATCH • 
MAN 
























DEPART- 
MENTS 






















MANUFAC- 
TURING 




TIME 




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TOP PLANT 


































STOCK 






SHIP- 
MENTS 










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- 


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PURCHAS- 
ING 
























PHONE 




RECEIVING 






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— 




— 










INQUIRIES 




- 


STORES 




























MESSEN- 
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SUPERVISE 
SHIP- 
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— 


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TIME 






COST AC- 
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MAINTE- 
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INSUR« 
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CHART 1, (Page 7): This is a plan of the factory before it was or- 
ganized. Notice the details handled by the purchasing agent 



PAY ROLL AND COSTS 



35 



MANAGER 



FACTORY 
MANAGER 







MANUFAC- 
TURING 


SUPT. 










BODY PLANT 










MAINTE- 
NANCE 







DEPART- 
MENT 



PURCHAS- 
ING AGENT 



PURCHAS' 

ma 



RECEIV- 
ING 







NIANUFAC- 
TURiNG 


SUPT. 










TOP PLANT 










MAINTE- 
NANCE 







DEPART- 
MENT 



DEPART' 
MENT 



OFFICE AND 
ACCOUNTING 





- SHIPPING. 






EXPERI- 
MENTAL 








TIME 


FACTORY 

r ACCOUNT- - 

ING 




COST 








GEN'L 
- ACCOUNT- 
ING 










p POSTAGE 


- OFFICE - 




. PHONE 





CHART 2, (Page 6): The plan of the re-organized factory, show- 
ing a proper distribution of responsibility 



36 



SYSTEMATIZING A FACTORY 



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PAY ROLL AND COSTS 37 

pay-period the factory manager and each of 
the superintendents were supplied with a re- 
port of the time lost by the various workmen 
from this cause. A short meeting of the fore- 
men was held each morning and it was a sim- 
ple matter for them to bring the subject up. 
After the plan was understood, the losses de- 
creased. 

A number of the employees worked upon a 
piece-work basis and for these a somewhat 
different system was tried. Piece-workers 
registered their arrival upon the payroll-card 
the same as the other employees, but instead 
of the operation-cards they turned in a daily 
report of their work to the foreman to be ap- 
proved by him and then forwarded to the time 
department. These piece-work reports, shown 
in Form 23, were entered upon the "Em- 
ployees' Piece- Work Record" (Form 24) by 
the timekeeper. 

In case it became necessary to change a 
piece-worker over to day-work he punched the 
operation-card the same as a day-worker with 
this exception: At the beginning of his day- 
work he was obliged to obtain an operation- 
card properly filled out by the foreman. At 
the close of the day this card must be dropped 
in the box for "Jobs Completed," located at 
the clock. 

The foreman was instructed to mark 
"piece-worker" across the top of the card as 
these cases were the exception and not the 
rule, and therefore there was likely to be 
some delay to the workman in receiving his 
full wages. These operation-cards were also 
entered upon the "piece-work record" and 
the payroll for the piece-workers was made 
up from this. Probably the employee would 
rarely, if ever, work upon more than two dif- 



38 



SYSTEMATIZING A FACTORY 



OPERATTON CARD 



§H5P OiRSi. 
PART NO.^ 



.LOT &ROi 



NO. OF PARTS. 
OPERATION 



WORKMAN'S NO.. 
NAME ^..^^ 



MACHINE^ 
DATE IN 

1-iS 



-— - — ,,.^,,,_,,..._ _ — DATE . 

OUT I IN I OUT SN OUT TOTAL 

. . 1 



2-17 



DATE. 



EMP. NAME. 
QUANT.®^^", 



PIECE WORKER'S SHOP 
DAILY REPORT ORDER_ 

^EMP. NO. 



ARTICLE 



SERIAL 
NUMBERS 



RATiE, AMT. 



DEPT. NO. 



J\PPROVED. 



FOREMAN 



31 



TOTAL TJWre. 



.HRS. 



RATE 



TOTAL WAG E^ $ 



FORMS 21 and 23: These operation cards are put in racks at the 
clocks. Piece workers use a daily report instead of an operation card 



PAY ROLL AND COSTS 



39 



PAYCHECK 



NO.. 



PAY ENDING 



.191 



TEAR OFF THIS CHECK AND PRESERVE CARE 
FULLY UNTIL HANDED IN FOR PAY. 

OVER 



PAY ENDING. 

NO. 

NAME 



19 



MORNING AFTERNOON OVERTIME 
DATE TOTAL 

IN OUT IN OUT IN OUT 

1 .16 



2 -17 



DUPLICATE 
PAY CHECK 



NO. 



PAY ENDING 
RECEIVED PAYMENT 

(SIGN HERe) 



14-30 



15-31 



TOTAL TIME. 
RATE. 



.HRS. 



TOTAL WAGES. 



FORMS 20 and 26: A stub tag pay roll card is used with Form 21 for 

day workers. A red card, Form 26, identifies the man who has lost 

his regular pay check 



40 



SYSTEMATIZING A FACTORY 



ferent orders during a pay-period; but a dif- 
ferent '* record" to each order number was 
assigned. After the completion of the order 
the cards were filed under that number, with 
other data relating to it. 

All operations in assembling or building 
bodies or tops were given a serial number 
and the employee was instructed to note this 
number upon his piece-work report, or, if a 
day-worker, upon the back of his operation- 
card. 

In the factory manager's office was kept a 
*' production schedule" (Form 25) upon 
which was noted the employee's number, op- 



dEPARTMEN?- 

ADORESS 

ADORE 
ADDRCS 
ADORES 
ADOREE 



PHONE NOt- 



ADDRE5 
ADORES 
ADORE? 



TRANSFERRED TO NO; — 

REPOI^T OP PERSONS TRANSFERRED 

TO THE manager: date »9»- 

I HAVE TaANSrCRREO 
name — NO. 



IN THE 

TO 

TO TAKE EFFECTr 



DEPT. AS A 

bEPt. is A — 



REPORT OF PERSONS ADVANCED 



TO THE manager: 



DATE '- - 

I REC'OWTVftrND ADVANCE 



crPTi Ks n- 



OLD rate *r- 



«JEVlLflATE «r 



To take effec.1^ 



remarks 
signed: 



OEPT. WEAO 



OiK.- 



FORMS 22, 27 and 28: When a man is hired, advanced, or trans- 
ferred the facts are accounted for on these blanks 

posjte the body and operation numbers, as 
shown on his card. This was used as a means 
of reference, and also as a check to prevent 
an employee from turning in a claim for work 



PAY ROLL AND COSTS 



41 




42 SYSTEMATIZING A FACTORY 

performed by some one else. This alone 
showed up some money that had been going 
out of the firm's hand which should have re- 
mained. If employees would report work done 
which they had not performed, when this sys- 
tem was started, it was reasonable to assume 
that they had been doing it for some time past. 

At first it was found that piece-workers 
would invariably quit about thirty minutes 
before the whistle on pay-day, and would 
come down to the office for their money. 
These, together with the men who had either 
left the company or were not working, would 
require an hour or more of the paymaster's 
time. He had all he could attend to. The 
employees' attention was called to that clause 
in the rules to the effect that they would not 
receive their wages until after quitting-time. 
Of course, this was objected to, but like all 
such matters soon died of itself. 

These same piece-workers would also quit 
fifteen minutes or more before quitting-time 
at noon and in the evening each day. They 
argued that their time was their own and so 
did the foremen, but after it was pointed out 
to the latter that the overhead expense went 
on whether half the men worked or they all 
worked, and that the production was mate- 
rially lowered by the loss of that half hour or 
more, they began to discourage this practice. 

The men had been in the habit of coming 
to a window in the office for their wages on 
pay-day and by this method they were some- 
times forced to wait over a half-hour before 
the last man had received his money. Need- 
less to say, this method did not tend to create 
any very pleasant feeling on the part of the 
men. 

Cages were erected, one on each floor, which 



PAY ROLL AND COSTS 



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44 SYSTEMATIZING A FACTORY 

would fold against the wall when not in use, 
from which the men were paid off. This 
method required less than ten minutes instead 
of thirty. 

Occasionally a workman would report the 
loss of his pay-check and would desire his 
money without it. It was found that in some 
instances an employee was unable to call for 
his money and a fellow employee would obtain 
it on this plea and later the absent employee 
would call for it. There was no means of 
identifying the party who had obtained the 
pay, so we decided to issue a ''duplicate pay- 
check" (Form 26). 

The employee who required one of these 
was obliged to wait until the day following 
pay-day and then present himself at the time- 
office with his foreman to identify him. The 
latter was obliged to endorse this pay-check. 

Like all firms, it was often found necessary 
to advance the wages of some of the em- 
ployees. For this purpose the blank shown 
(Form 27) was filled out by the foreman, 
O. K. 'd by the superintendent and in some in- 
stances approved by the manager. 

Whenever it was necessary to transfer an 
employee from one department to another a 
report (Form 28) was issued, and when it 
was approved by the proper authority the 
report was sent to the timekeeper. The 
changes in the clock-numbers took effect the 
first day of the pay-period. All of these em- 
ployees' records were filed in an envelope 
under his number and it was possible to refer 
to his whole history at any time. 

To reduce the number of docked cards a 
"tardy list" (Form 29) was prepared at 
the close of each pay-period and a copy for- 
warded to each department-head concerned. 



PAY ROLL AND COSTS 



45 







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46 SYSTEMATIZING A FACTORY 

A summary of these was also furnished the 
superintendents. Its effect was in every way 
very beneficial. 

In the time department was also kept a 
*' lost-time report" (Form 30) for each 
employee. Tliis sheet was good for a year's 
report and reference might be had to it when 
decreasing the working force or weeding out 
the irregular ones. 

When an employee left the company's 
service the department head issued a "final 
pay-ticket" giving the cause and other in- 
formation. This is shown in Form 31. The 
tool and supply stockkeeper would then re- 
ceipt on this card for all tools loaned and re- 
turned. Such articles as belonged to em- 
ployees were passed out by the watchman 
upon presentation of the stub. The paymas- 
ter was notified immediately by telephone so 
that he could make up the employee's time. 



IMPREST CASH VOUCHER no* 



necEivEo rtnw the AUTO MFG. CO., 9~ 



-DOLUVRS 



FOR 



CHARGE ACCOUNT ENTERED ON SUMMARY NO. ; CERTIFIED CORRECT 

DATE ENTERED ON SUMMARY APPROVED BT 



FORM 32: When the pay-master's petty cash runs low he uses this 
voucher for reimbursement 

His wages were taken from the imprest cash 
kept in the time-office for this purpose. 

When his cash became low a cash voucher 

(Form 32) was issued to reimburse his petty 

cash. This latter must be accounted for at all 

times. A "denomination sheet" (Form 33) was 

used in making up the pay-roll for the bank. 



9 e P ssiiaunHu"^ ' YlBiiiiiinamuuitHuunuK 5 »"QeoSiSC 

J HUB mm J. ^ V|A \\\x\\«Sl>X\*,'*^X^VV ' OJ^ 
S S ^ Hnnisiiiiii ■■ III! iiiii nil III MBii III 



RULES FOR 
SYSTEM 

!^EE that a broad view of the 
subject is taken^ and provi- 
sion made for properly dovetail- 
ing" the various departmental 
systems. 

Make the connection clear to 
all employees by the use of a 
chart. Such a table is self in- 
terpreting and saves much ex- 
planation. 

Do not treat the system as a 
fetich. It is a good servant, but 
a bad master. So much of it as 
is justifiable is merely organized 
common sense. Prune and pare 
your system without stint, until 
it gives the utmost economy and 
dispatch. There are many daily 
items of shop practice being 
perpetuated in expensive card 
systems today, of which no use 
whatever is being made, or is 
ever likely to be made. 

— John Caldek 



IV 



MORE WORK IN THE SAME 
SPACE 



WHAT has been told in the preceding 
chapters has referred more particu- 
larly to the accounting end of the 
business. After the routine of handling ma- 
terials and pay-roll had been straightened 
out, production methods were considered. 

Our production was thought to be very good, 
for the size of the plant, when compared with 
plants of similar proportions. However, the 
demand for greater production became so 
urgent that something had to be done and that 
quickly. To make a small addition would be 
false economy as the property was situated 
so that it was possible to build in only one 
direction. Plans had been drawn in which it 
was proposed to tear down the major portion 
of the present plant and build a much larger 
factory on a piece of property in the imme- 
diate neighborhood. 

In view of this, it was advisable to see if 
production could not be boosted up without 
increasing the floor space. This meant to get 
definite data on the production of each depart- 
ment and the space assigned to each. In the 
past the factory manager had been content to 



SAVmG WORKING SPACE 49 

take tlie daily shipments for his production 
data. Of course, with these only, he had no 
means of checking up the various departments 
as they might all be held up because of the 
delay of one department in getting out the 
work. 

Specification sheets were prepared. Every 
item that entered into the makeup of a body 
or top was entered upon a sheet. As far as 
possible each of these items was assigned a 
serial number by which it was known. Of 
course, such items as glue, thread, and so on, 
were not given numbers. After these sheets 
were completed it was possible to work intelli- 
gently. Inventory had been taken so we 
knew what was in stock and through our 
newly installed stock record systems we could 
tell the quantity on hand above orders. 

When a new lot of bodies or tops were to 
be made (which was about once each week, 
each lot being two hundred and fifty) the pro- 
duction order was issued by the factory man- 
ager. The original (Form 34) was retained 
by the factory manager, duplicate (Form 35) 
sent to the cost department. On the reverse 
side of this was space ruled for the cost rec- 
ords which will be taken up in detail further 
on. Each department was furnished vdth a 
copy of Form 35. 

All operations were listed and numbered 
and copies supplied to the various depart- 
ments interested. A *' finished stock sched- 
ule" (Form 36) was issued for each part re- 
quired and the necessary daily production 
noted on same. As the parts were sent from 
one department to the next it was accompanied 
by an ''interdepartmental receipt" (Form 
37). The foreman receiving goods checked 
the quantity received with the receipt and re- 



50 SYSTEMATIZING A FACTORY 

ceipted for same. The duplicate was returned 
to the department issuing same while the orig- 
inal was collected by the office boy at short 
intervals and turned over to the factory man- 
ager. It was then a small matter to enter these 
upon the finished stock schedules. If produc- 
tion was behind schedule set, or increasing to 
the detriment of other parts, steps to remedy 
the conditions could be taken immediately. 

By means of this the cause of the delay in 
shipments was soon ascertained, something 
which was obviously entirely out of the ques- • 
tion before. Of course reasons would be ad- 
vanced by all questioned, but as these varied 
with the parties they did not count for very 
much. If a foreman found that his supply of 
stock was running low he immediately sent a 
copy of the ** daily shortage report" to the 
superintendent. He followed up the reason. 

Each day's production was shipped the fol- 
lowing day with but very few exceptions and 
the *' shipping memorandum" (Form 38) was 
used. The original went with the goods or the 
Bill of Lading when shipped by rail, duplicate 
retained by shipping clerk, triplicate sent to 
the accounting department from which the 
invoices were made, while the last copy was 
sent to the superintendent. 

The factory manager was supplied with a 
** memorandum of daily shipments" (Form 
39) by the shipping clerk. From these it was 
possible to tell at a glance the totals for the 
day, for each model, and also the total to date. 
In the top plant shipments were made mostly 
by rail and were usually made but two or three 
times per week instead of daily. Memoranda 
of shipments as made were supplied to the 
manager the same as that for the bodies. 

What fits in one business very well may not 



SAVING WORKING SPACE 



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52 SYSTEMATIZING A FACTORY 

do at all in another, and it therefore behooves 
each manager to investigate the merits of any 
system and endeavor to determine for him- 
self as to the adaptness of it for his own use. 



THE AUTO MFG. CO. duplicate 

PONTIAC, MICH. 

SHIPPING MEMO. 



6HIPPCO TO_ 



EERIAl NO 



SKIPPING MEMO. 



SHIPPED TO_ 



seniAt no. 



JIRTICH 



---: -^=»AS 



INSPECTED ^ SHIPPER. 



FORM 38: Is made out in triplicate. From the third copy, invoices 
are made out 

In the cost system outlined below it was not 
desired to ascertain the individual cost of the 
various parts used, though to do this would 
have meant merely the extension of their de- 
tail. The first step was to set up the *' manu- 
facturing accounts" separate from the ** gen- 
eral accounts." These are shown below and 
included everything pertaining to the cost of 
manufacturing. 

After this had been accomplished each de- 
partment was assigned standing shop orders 
to cover all supplies of various natures. 
Whenever any such supplies were required 
they were requisitioned out from stores on 
these numbers. It was then possible to fix the 
overhead expense for supplies on each depart- 
ment and these costs could be used to check 
the following month's report. 



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56 SYSTEMATIZING A FACTORY 

At the end of each month a manufacturing 
report was made out showing the cost of jobs 
in progress, jobs completed and an analysis 
of the departmental expense. For this pur- 
pose Form 40 was used. As each shop or- 
der was issued the duplicate copy came to the 
cost department and was placed on file. Each 
morning the timekeeper sorted out the time- 
cards and piece-workers' slips turned in ac- 
cording to the order numbers. They were then 
posted on the back of this order copy. If this 
copy became filled an additional sheet (Form 
41) was used. Upon completion of the or- 
der the various requisitions were sorted and 
extended and then totaled according to the 
material after which they were posted on the 
order sheet. The labor could then be totaled 
and the overhead expense ascertained from 
the monthly report. The total of these three 
would be the cost of manufacture. 

We cofuld then post these costs on the '* com- 
parative cost record" (Form 42) from which 
it is possible to watch the costs. In case any 
increase over a previous order was found 
the manager could quickly locate the reason 
as the shop orders were issued for amounts 
covering as a rule but one week's production 
and anything unusual would be fresh in the 
minds of all department heads. 

An inventory of all machinery and other 
equipment was made and each piece assigned 
an equipment number. Equipment sheets 
(Form 43) were made out for these and all 
charges for repairs, replacements, and so on, 
were noted on same. From these sheets we 
could tell the valuation of the plant equip- 
ment. 




EACH UNIT A 
MACHINE 

T^ACH unit in a factory, 
whether it is a department 
or a building, may be considered 
a machine with certain functions. 
To keep that machine operating" 
at its highest speed and with the 
greatest efficiency means that 
the ''use- factor" of that section 
or of that building approaches 
the hundred per cent mark. 

It may take only a general 
study of a department to show 
where time is wasted, where out- 
put might be doubled if little 
changes in equipment for han- 
dling material, better light, dif- 
ferent arrangement or methods 
ofhandling machines were made. 
Or it may take a stop-watch 
study of detail operations to 
point to the weak spots and 
losses. 

— p. L. Battey 



V 




SMOOTHING OUT KINKS IN 
ROUTINE 



^NE large motor car company kept quite 
a considerable force in their engineer- 
ing department employed continuously. 
Efforts had been made at different times to 
cut down the size of the force, but eventually 
it became necessary to increase it to its for- 
mer size and occasionally to exceed that. The 
majority of the engineering force was engaged 
upon routine work. The size of the experi- 
mental engineering department was kept 
within close bounds. To add to the difficulties 
the personnel of the force was changing un- 
expectedly at all times. The employees 
seemed to feel that their positions were some- 
what insecure and at the first opportimity 
would leave. 

How the Engineering Department Was Re- 
duced and Its Efficiency Increased 

Under the old regime it had been customary 
to keep several high grade men on who were 
supposed to be capable of handling any kind 
of engineering work which might come up. 
One man would be working upon motor de- 
signs and later be switched off on to chassis or 



SYSTEMATIZING A FACTORY 59 

running gear designing. As a result no one 
man was thoroughly conversant with any one 
group. As regards the detailers, they were 
grouped into those capable of handling intri- 
cate details and those whose ability was 
limited to the minor details. Then came a 
large number of tracers whose sole duty it was 
to trace on cloth the details made by the de- 
tailers. In all, about forty-five men were re- 
quired to handle the work. 

The salaries paid were as follows : design- 
ers, $115 per month; Al detailers, $95 per 
month; second class detailers, $80 per month; 
tracers, $40 to $65 per month. The new sys- 
tem was arranged on the following plan : de- 
signers instead of being assigned to all classes 
of work were grouped into squads. One man 
was placed in charge of all motor and trans- 
mission work. Everything pertaining to 
power plant came under his jurisdiction. For 
this he was paid $150 per month. This salary 
was greatly in excess of the former salary, but 
the object in paying it was to insure a really 
good man on the job (which was quite impos- 
sible before) and keeping him there. 

To another was assigned everything per- 
taining to bodies, tops, fenders, and so on. 
One had everything connected with steering 
gear, axles, springs, and so on, a fourth had 
the chassis and all control mechanism, and 
the fifth had experimental work. These men 
constituted the engineering department and 
were held responsible for everything under 
their direction. The drafting room now con- 
sists of tracers and the second grade of de- 
tailers only. The best among the detailers have 
been distributed as assistants in the engineer- 
ing department. All designs are worked up 
by the engineers in charge and the princi- 



60 SMOOTHING OUT KINKS 

pal details made by their assistants. As each 
engineer has but one assistant it will be seen 
that the force is not exceptionally large. 
After the designs and major details progress 
sufficiently far, a part list giving the name of 
each and every part is made up by the engi- 
neer for reference. Then a requisition is 
made by him upon the chief draftsman for 
additional assistance. The chief draftsman 
assigns other men to assist the engineer in get- 
ting out the details. Usually not more than 
one man is required, at the most, two. The 
details are made upon a tracing paper and 
after receiving a general check from the en- 
gineer they are turned over to the checker in 
the drafting room. 

How Blueprints Are Made and Issued to the 
Experimental Department 

After the experimental work has been com- 
pleted and the necessary minor changes incor- 
porated on the drawings these same drawings 
are traced upon cloth. Inasmuch as the detail 
drawings have been checked, it is possible for 
a tracer to perform twice as nmch work as 
formerly because he is not obliged to confer 
with the detailers in regard to the drawings. 

If the experimental department finds that 
certain details in design require changing they 
report to the engineer in charge of that work 
and not to the chief engineer. After the work 
has reached the manufacturing department, 
it sometimes becomes necessary to make minor 
changes. These are always referred to the 
engineer in charge. In this way a vast amount 
of purely routine labor has been removed from 
the chief engineer and assigned to men who 
are more conversant with the small details. 

The chief draftsman was not obliged to keep 



SYSTEMATIZING A FACTORY 61 

a large force of designers on hand, each 
familiar in a general way with motor car de- 
sign and apt to leave at any time. The size of 
the entire force was reduced from forty-five 
men to twenty men made up as follows : five 
engineers, five assistant engineers, five detail- 
ers and tracers and five tracers. 

Every week the engineers were called into 
conference with the chief engineer, general 
manager and the factory superintendent. 
These conferences would usually take up about 
two hours and all questions pertaining to de- 
sign and manufacture were thoroughly dis- 
cussed. The former chief engineer was made 
the consulting engineer and was consulted by 
the general manager in regard to all engineer- 
ing problems. The former assistant engineer 
was made chief engineer in charge of the en- 
gineering department, the experimental de- 
partment, laboratory and drafting depart- 
ment. It was found that by the adoption of 
this plan the expense of operating the engi- 
neering department was decreased, new work 
was greatly expedited, because the engineer in 
charge knew that he must report progress to 
the general manager. However, no difficulty 
was experienced as numerous applications 
were received from first class men who had 
reached the limit (about $125) paid in draft- 
ing rooms, and from these the new engineer- 
ing department was recruited. 

B^otv a New Scheme for Specifying Tools to 
Use Was Inaugurated 

All special taps and dies, reamers and other 
small tools were listed upon data sheets in the 
drafting department. All sheet metal parts, 
those requiring steel tubing, and so on, were 
compiled. It was found that in several cases 



62 SMOOTHING OUT KINKS 

parts were raade from different gauges which 
could have been made from the same gauge as 
well as not. The material specifications were 
changed so as to call for the same gauge where 
possible. Certain gauges were then compiled 
on a data sheet and future drawings called for 
gauges contained thereon instead of leaving 
this question to the draftsman. All broaches 
were listed and when new details were drawn 
dp the detailers and checker were instructed 
to use standard tools where possible. In this 
way many small tools were saved as previously 
the drafting room was not informed on this 
subject. The many variegated stocks of ma- 
terial were decreased and it became possible 
for the purchasing department to order a 
larger supply which, of course, enabled it to 
get better prices. 

One man in the laboratory was placed in 
charge of all material specifications. It was 
his duty to specify the analysis and treatment 
of the different metals used. In the labora- 
tory was a complete chemical and physical 
equipment which was used far more than un- 
der the old plan. In several instances it was 
possible to reduce the size of certain screws 
and studs by substituting a little better grade 
of steel at practically no extra cost. Repairs 
due to defective material or poor design were 
gradually eliminated because certain men were 
held responsible for these items. 

A small library was also started by the en- 
gineering department in which were filed all 
technical papers, catalogs, and so on, of inter- 
est to that department. This was placed in 
charge of a clerk and copies were furnished 
upon requisition. This eliminated no small 
amount of delay due to the inability to obtain 
certain information contained in catalogs or 



SYSTEMATIZING A FACTORY 63 

trade papers. It was the duty of the clerk to 
keep on file everything obtainable regarding 
automobiles and tools. 

In the factory several accidents resulted to 
employees due to finger rings catching in mov- 
ing machines or tools. While the company 
was not legally responsible for these accidents, 
still the fact that an employee 's finger was in- 
jured decreased his working efficiency. A no- 
tice was then posted to the effect that all em- 
ployees must remove finger rings during work- 
ing hours or else wear working gloves, the 
reasons for this order being given. As a result 
the number of minor accidents was greatly 
decreased. 

The factory engineer was requested to fur- 
nish figures showing the safe loads which 
could be carried upon the different floors. 
Signs were then posted in each department 
giving this information. Foremen were in- 
structed to see that these figures were not ex- 
ceeded. In several instances it was found that 
heavy castings, and so on, were stored in such 
small quarters that the safe load was greatly 
exceeded. Steps were immediately taken to 
correct this. 

Each building is separated from the adjoin- 
ing one by a brick wall, and brick fire parti- 
tions separate most of the departments. Fire 
doors are provided and an elaborate sprinkler 
system. However, a fire broke out one night 
and the firemen lost considerable time in loca- 
ting the source of fire. The fire was confined 
to one department, but the firemen entered a 
window on the wrong side of the brick wall. 
The next day a large white strip was painted 
on the outside walls showing the fire walls. In 
addition to this a bulletin was posted up at 
the main entrance giving the location and sizes 



64 SMOOTHING OUT KINKS 

of the various hydrants distributed throughout 
the plant. 

Considerable trouble had been experienced 
in one plant due to the wrong material being 
dispensed by the stockroom. This applied to 
the analysis of different steels. For some rea- 
son steel of one analysis was placed with that 
of another. Inasmuch as it was impossible to 
discern one from the other by appearance, re- 
course was had to assigning a number to each 
analysis, and each bar was painted on the end 
with this number as soon as received. It is 
now an easy matter to keep the stock straight. 







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ECKMAN 

NDERY INC. 

^ DEC 90 

N. MANCHESTER, 



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